1. Technical Field
The invention relates to home asset management. More particularly, the invention relates to a system and method for providing a bundled home asset management package to customers.
2. Description of the Prior Art
Traditional home financing typically combines a traditional home mortgage and a variety of home equity products or programs, such as home equity loans and home equity lines of credit. An application is required for each home mortgage and for each home equity product and they typically have different points of sale. Also, payments for each are typically unrelated. In short, such home mortgage and home equity products are established, treated, and maintained independently.
Recently, some systems have been proposed to combine home mortgages with other investment vehicles. One such system creates mortgage plans based upon mortgages that are at least partially collateralized by investment vehicles (U.S. Pat. No. 4,876,648). Also, a personal financial management system has been suggested which applies client funds that would normally be used to amortize a mortgage to instead increase the value of a designated asset account.
Clarke B. Lloyd, System and Method for Implementing and Administering a Mortgage Plan, U.S. Pat. No. 4,876,648 (Oct. 24, 1989) discloses a computerized mortgage implementing a system including a central service computer that helps establish and maintain mortgage plans based upon mortgages that are at least partially collateralized by investment vehicles. Both investment vehicle information and mortgage information are stored in the service computer. Borrower information is entered in the service computer when a mortgage plan is to be established and one of the groups of investment information is selected. Thus, a desired amount of the investment funding is determined for helping repay the mortgage plan. Mortgage implementing information is generated for a given mortgage plan, and is sent to a mortgage lender computer to facilitate the establishment of the mortgage plan.
Lloyd teaches a new methodology for acquiring a mortgage and for its subsequent payment. Nowhere does Lloyd teach or even suggest immediate availability of a customer's equity through mortgage principal paydown or property value increases throughout part of or all of the life of the mortgage.
Robert Altman, John W. Cleary, and Morris Markowitz, System for Operation of a Combination Mortgage, Equity Load and Savings Plan, U.S. Pat. No. 5,689,649 (Nov. 18, 1997) disclose a nest egg mortgage which combines the benefits of a conventional home mortgage, a home equity loan, and an individual retirement account (IRA). Altman et al teach operating and implementing a nest egg mortgage plan that comprises determining an amount of mortgage for which an applicant qualifies, and a predetermined term of repayment of principal therefor based on conventional lending practices, creating an accelerated payment schedule for the mortgage so that the principal is repaid within a shorter time than the predetermined term of the mortgage, applying the difference between the accelerated payments and non-accelerated payments as a source of equity, providing an equity loan against the source of equity, and applying the loan to generate an investment vehicle. The amounts placed in the investment vehicle increase in value over the term of the mortgage while the equity loan and mortgage principal are repaid to the lending institution by the end of the term of the mortgage. Nowhere does Altman et al teach or even suggest immediate availability of a customer's equity through mortgage principal paydown or property value increases throughout part of or all of the life of the mortgage.
Lawrence Weiss and Marylou Dowd, Integrated Full Service Consumer Banking System and System and Method for Opening an Account, U.S. Pat. No. 5,866,889 (Feb. 2, 1999) and U.S. Pat. No. 6,131,810 (Oct. 17, 2000) disclose an integrated financial system that includes a single customer account permitting a customer to perform various financial transactions. The account includes banking and brokerage components. A consistent user interface means is provided to allow a customer to access the account from different sources, such as an automatic teller machine, a phone and a personal teller transaction. The account is flexible enough to include a variety of other components, such as a credit card component, a line of credit component, a secured credit component and a money market component. A system and method for opening a single integrated account for a customer in a single session is also described. However, nowhere does Weiss et al teach or even suggest immediate availability of a customer's equity through mortgage principal paydown or property value increases throughout part of or all of the life of the mortgage.
Sidney Gottesman, Darlene Shuman, Patricia Eletto, Ben Gurdus, Bob Santariello, Jay Murthy, and Michael Spivak, Relationship Management System and Process for Pricing Financial Instruments Based on a Customer's Relationship with a Financial Institution, U.S. Pat. No. 6,049,782 (Apr. 11, 2000) disclose a system and process for use by a financial institution to facilitate relationship pricing in connection with a single account that includes a plurality of account components, including a checking component, a savings component and a investment component. The system includes software engines operated on specially programmed general purpose computers. The engines are sub-systems that generate input and drive another sub-system or the product processors. The overall function of the engines is to allow, among other things, pricing to be determined based on a customer's total individual or household relationship to the financial institution. The preferred system includes a rate engine, a pricing engine, a linkage engine, a balance engine, and a cycle engine.
Michael A. Johnston, Home Mortgages Can be More Than Just Debit; Manage (August/September 2000) teaches combining mortgage with a home equity line of credit by financing up to eight-five percent of the home's purchase price.
Glenn B. Canner, Thomas A. Durkin, and Charles A. Luckett, Recent Developments in Home Equity Lending, Federal Reserve Bulletin (April 1998) disclose several new types of home financing loans.
Glenn B. Canner and Charles A. Luckett, Home Equity Lending, Federal Reserve Bulletin (May 1989) teach that the home equity loan market is dominated by depository institutions, especially commercial banks and to a lesser extent savings institutions. Canner et al continue to say that some relative specialization by type of home equity loan product is observable among creditors. In particular, finance companies have an insignificant role in the market for home equity lines of credit. Among depository institutions, commercial banks and savings institutions have roughly equal shares of market for traditional home equity loans, but banks are the predominant source of credit lines, accounting for fifty-four percent of the total market.
While the prior art references address specific aspects of home asset management components, none of the prior art references provide a program designed to meet changing credit needs experienced by the vast majority of consumers. Such needs vary based on demographic characteristics, attitudes towards credit, household composition, and stage of life. It would be advantageous therefore to provide a program targeted toward a wide range of customers, such as, for example, first time homebuyers, move-up homebuyers, and empty nesters. Further, it would be advantageous to provide availability of maximum equity in a borrower's subject property at all times by performing an automatic process that sweeps principal paydowns from first mortgage into home equity products, as well as line increases based upon the appreciation of the subject property value. From a company's point of view, it would be advantageous thereby supporting customer retention.